Deep in the rainforest of Equatorial Guinea, a giant dome of steel and glass
forms the centrepiece of one of the most grandiose construction projects in
Africa.

The library of the new International University of Central Africa resembles a space ship docked in a jungle clearing. This is only a small part of President Teodoro Obiang's ambition to build an entirely new multi-billion-pound capital by 2020, to be called Oyala.

Down a new six-lane highway, dubbed the 'Avenue of Justice', Oyala's first luxury hotel is taking shape at a cost of £250 million. A golf course has already been carved out of the virgin forest.

Mr Obiang himself is a frequent visitor to the construction sites, causing one university building to be moved because he disapproved of the view.

Within a decade, Oyala will house the president, the government and – according to the master plan – up to 200,000 people. The money will come from Equatorial Guinea's 1.7 billion barrels of proven oil reserves.

Where the new capital will find its inhabitants is harder to understand. The population of the entire country is only 700,000 and the vast majority live far away on the Atlantic coast.

But Oyala's very remoteness makes it appealing to Mr Obiang. In a rare interview, he described how rebels had plotted a seaborne assault on his palace in the current capital, Bata. "We need a secure place for my government and for future governments. That's why we have created Oyala, to guarantee the government of Equatorial Guinea," he said.

The president's obsession with security is rooted in his past. He came to power by toppling his own uncle 33 years ago. Critics and human rights activists are invited to reflect on their disloyalty in Malabo's Black Beach prison.

Many opponents have been accused of conspiring with foreign powers to bring down the government. The failed coup attempt led by Simon Mann, the British mercenary, in 2004 fuelled Mr Obiang's paranoia, particularly as Sir Mark Thatcher, the son of the former prime minister, admitted to providing some of the funding.

"That coup attempt was organised by certain powers – we know all about it," said Mr Obiang. "Margaret Thatcher's son was involved. Also other well-known personalities. It is not possible that it was organised in Spain, London, South Africa and in the United States without the knowledge of the security services in those countries."

Relations between Mr Obiang and Western governments remain complicated. They want access to his oil wealth, without appearing to endorse his regime. For his part, the President is particularly vexed by legal action against his eldest son and likely successor, Teodorin, in France and the US.

French investigators have seized a Paris mansion and 12 luxury cars belonging to Teodorin. The US is trying to confiscate a home in Malibu, a private jet and Michael Jackson memorabilia worth two million dollars.

The US Department of Justice alleges that Teodorin Obiang, who was recently appointed Vice-President, diverted tens of millions of dollars of state revenues into personal accounts.

But Mr Obiang defended his son. "The process in Paris is a farce, a political set-up," he said. "They are accusing my son of having illegally acquired these things but they have not sent a commission to this country to make inquiries. No one steals here."

A five-minute drive from the presidential palace provides ample evidence that Equatorial Guinea's oil riches are not benefiting most of its people. A baker in a ramshackle neighbourhood of tin-roofed shacks said: "We don't have clean water, and we don't have any sanitation."

A youth in his twenties allowed anger to overcome caution: "The president and his family are nothing but thieves," he said. "Yes, people are frightened, but one day there will be an explosion here'."

For now Mr Obiang appears in complete control. In the last presidential election, he won 97 per cent of the vote. "It's a police state, just like North Korea," said Placido Mico, the only opposition MP in parliament. "They use the oil money as a weapon against democracy."

Having seized power in 1979, Mr Obiang, 70, is now the longest-serving leader in Africa – and the longest-serving head of state in the world, aside from monarchs. Does he intend to stay for long enough to transfer his government to the new jungle capital? "It depends on the will of the people," he replied. "When the people want something we should not disappoint them."

Stephen Sackur's reports from Equatorial Guinea will be on the BBC's 'HARDtalk' and 'Ten o'clock News'.